Fan Box: Study says arena's economic impact on Reading worth $254M

How much is an arena worth to a community? What economic value could be placed on the home of a minor-league hockey team and host to concerts, family shows and large-scale conventions?

View full sizeSubmitted photoReading's Sovereign Center, home of the ECHL's Reading Royals, opened in September of 2001 and has attracted more than 4.5 million visitors.

Somebody asked those very questions recently in Berks County as Reading's Sovereign Center moves into its second decade of operation.

According to a study conducted by Penn State Berks Associate Professor of Business and Economics Dr. Lolita Paff Ph.D., the Sovereign Center and Sovereign Performing Arts Center generated more than $254 million in direct economic impact on Reading and the surrounding area since its opening in 2001.

The conclusions of this study, which accounted for the operations of the Sovereign Center and the Sovereign Performing Arts Center, were based exclusively on direct spending impacts and did not utilize any economic multipliers. This statistical model was utilized in order to ensure that the figures reached accurately reflected actual business activities that were strictly generated by these facilities.

In that regard, the study did not attempt to account for other indirect economic impacts that certainly spin off from activity at the downtown arena and theater.

Specifically, the Sovereign Center and SPAC were shown to have spent more than $56 million directly on payroll, purchases of goods and services, tax payments, city-owned parking revenue, and charitable giving. This includes almost $3.0 million in parking revenue and over $3.6 million in City Amusement Tax payments.

The study also calculated that over 4.5 million people have attended events hosted by the arena and theater facilities, and those patrons have generated almost $200 million in direct economic activity in four primary categories: (i) the purchase of meals; (2) the purchase of gasoline; (iii) shopping expenditures; and (iv) hotel revenues from overnight stays.

Since its inception, the Sovereign Center, which can seat between 6,000–9,000 patrons depending on its configuration, has hosted a wide variety musical acts, theatrical performances, school commencements, and sporting events, which include serving as the home ice facility for the Reading Royals professional hockey team of the ECHL, the building’s original anchor tenant.

With over 25,000 square feet of convention space, the Sovereign Center can accommodate banquets for up to 800 guests. The arena also contains a 4,500 square foot multi-purpose room, which can handle functions for up to 200. The convention center configuration has proven particularly well suited for functions such as the district conventions of the Christian Congregation of Jehovah’s Witnesses, which have generated over $110 million in direct economic activity in the greater Reading region since 2006.

In 2004, a universal theater configuration was designed within the arena facility, and the naming rights were purchased by Reading’s local newspaper. This Reading Eagle Theater allows for more intimate set ups within the arena, accommodating from 2,500 to 4,000 patrons.

As with the arena facility, the SPAC has also served as host to a myriad of musical and theatrical performances, which includes serving as the resident host facility for the Reading Symphony Orchestra, and has a seating capacity of over 1,800 with unique ballroom capacities that can serve between 150 to 400 guests.

Back in July, the Royals entered into a one-year affiliation agreement with the National Hockey League's Washington Capitals and American Hockey League's nearby Hershey Bears, which figures to give a boost to Reading's attendance.

Last season, the Royals drew 157,146 fans to 36 home games for an average of 4,365 per night. That figure ranked 10th among the ECHL's 20 seasons during the 2011-12 season.

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